UK Law on a Gentleman's Agreement

Written by holly cameron

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A handshake agreement can be legally binding. (handshake image by Anatoly Tiplyashin from Fotolia.com)

A gentleman's agreement is an oral agreement between two or more parties, usually based on a handshake or an understanding of trust. In the United Kingdom, the legal standing of such an agreement would depend on whether the parties intended to be legally bound by the agreement.

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Oral Agreements are Enforceable

According to Ewan McKendrick's "Contract Law," a contract does not need to be in writing in order for it to be legally binding. A gentleman's agreement may therefore be enforceable by a court in the event of a dispute.

Intention

The essential analysis of a court would centre on what the parties intended by the agreement and in particular whether they intended to be legally bound by it. The law regarding intention is complex. It considers not only the each party's subjective intentions, but also whether the facts when viewed objectively would indicate that a legally-binding contract had been formed.

Consideration

In England, but not in Scotland, an agreement must generally include some element of "consideration" in order to be enforceable. Consideration is a sum of money that is paid by one party to another, usually in return for services or goods.